Venezuelan supply concerns push Brent higher

The front-month ICE Brent contract has gained by $0.32/bbl on the day, to trade at $61.76/bbl at 09.00 GMT.

IMAGE: Oil storage tanks in the Port of Amsterdam, Netherlands. Getty Images

Upward pressure:

Brent has rebounded after the previous day’s losses, supported by renewed concerns over disruption to Venezuela-linked oil supply.

Earlier this week, the US Coast Guard seized an oil tanker off the coast of Venezuela, that regularly transported US-sanctioned oil on behalf of Venezuela and Iran.

The news has marked a major escalation in geopolitical tensions between the two countries “and threatens up to 560kb/d [560,000 b/d] of crude oil exports,” ANZ Bank’s senior commodity strategist Daniel Hynes said.

Washington is preparing to intercept more vessels carrying Venezuelan oil, Reuters reported citing sources. “Shippers may become reluctant to load Venezuelan cargo,” Hynes added.

Downward pressure:

Brent’s price has come under some downward pressure following statements from Ukraine’s President Volodymyr Zelensky, according to market analysts.

“He [Zelensky] indicated that the United States wants to understand the status of peace proposals by Christmas, but clarified that there is no firm deadline set by the US regarding these proposals,” remarked Price Futures Group’s senior market analyst Phil Flynn.

Besides, leaders from France, Germany and the UK held a telephone call with US President Donald Trump this week, to discuss efforts to end the four-year long conflict in Ukraine.

A peace deal between Russia and Ukraine could ease global sanctions on Russian energy and bring sanctioned oil volumes back to the market, according to analysts.

By Aparupa Mazumder

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